Theme 2: On the Ground - Current Practices of Involving Business

[Peace Through Commerce]

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A discussion moderated by Michael Strong, CEO & Chief Visionary Officer, FLOW, Inc. Visit Biographies for more about presenters

What do thought leaders believe it will take to manifest peace through commerce?
This session feature entrepreneurial experiences of using both public and private institutions to help frame the activities of business so that commerce is an activity that lifts people out of desperate circumstances. And so, this session focuses on actions of an entrepreneurial endeavor by the U.S State Department, programs of an international school of business, and a women’s entrepreneur network.

Presentations: Watch the videos and join the discussion with presenters below.

	Kellie Kreiser, Director, Thunderbird for Good, Thunderbird School of Global Management "A Model of Business School Engagement"(11:34)			Sandra E. Taylor, President and CEO, Sustainable Business International "An Example of Fostering Women's Entrepreunership"(12:28)

Steve Kaplitt, United States Department of State, Economic Empowerment in Strategic Regions (EESR) "The Economic Empowerment in Strategic Regions Initiative" (11:25)		Resources Videos: Stephen Kaplitt talking about ESSR Program Why Job Creation Is a Matter of Survival In Many Areas of the World Thoughts on Links Between Poverty and Terrorism Article: US promotes business in conflict regions - Steve Kaplitt interviewed about ESSR program by Phillippines Government

Discussion: What will it take to manifest peace through commerce?

Frequently, people think of the troubling things business might do or they might focus on what really large companies do. This session is a little different in that it looks at small, entrepreneurial actvivites - often in a parternship model - that concretely have notions of business and stability in the forefront of their minds.

• What lessons do you think these entrepreneurial examples provide that can be built upon by others?
• Do you know of other examples similar to these?
• Brainstorm & action questions:
• What business ideas can we identify that could help create more peace?
• Can we, the community of people interested in Peace through Commerce, identify additional examples of entrepreneurial opportunities that may reduce conflict or create peace?
• What obstacles are there to the creation of these new entrepreneurial projects on behalf of conflict reduction and peace?

[Natalie Ralph]

Thank you for this highly insightful discussion. Stephen Kaplitt has written that ‘commerce and jobs alone cannot solve deep seated political, religious, historical conflicts…there are real limitations unless and until there is political resolution.’ I realise there is quite some discussion happening regarding this point. I’d like to ask a couple more questions along this line.

If this is so, then we need to take a step back and ask, in the pre- and during stages of violent conflict, what can domestic enterprises and entrepreneurs do to assist such political resolution?

Secondly, what can other actors do to help them in this endeavour?

Thirdly, as my focus is on TNCs and how they can assist this political resolution of conflict, how can TNCs do so by supporting, partnering, or using other linkages with SMEs and micro enterprises (or indeed, other actors)?
Thanks.

[Stephen B. Kaplitt]

Thanks Michael. You've framed the issue quite well, actually. I agree that if the average per capita GNP across the Arab world were $30-40K the Israeli-Palestinian conflict would be much easier to resolve. My point on causation is that perpetuation of the conflict can fairly be seen, in part, as a product of stagnation in the Arab world. So while economic aid and job creation will not, in my view, solve the conflict, resolution would be more likely if the Arab world addressed the underlying causes of stagnation -- which would facilitate economic growth and mitigation of multiple political problems.

Hi Natalie, my short answer is each case is different. Where economic factors are significant drivers of conflict, promoting entrepreneurship can have a big impact. Where economics is more of a casualty, I'm afraid progress must be pursued elsewhere. And often the distinction is gray, not black and white. In Mindanao, the Moro Liberation Front is Islamist but motivated more by practical grievances, therefore economics matters to them. But the Abu Saayaf Group is motivated almost purely by ideology. Creating jobs for their constitutents is unlikely to dull their commitment to their own Islamist vision.

[Zach Cutler]

Thank you, for all of this insightful information. I am very familiar with one nonprofit organization that does leadership development in Third World countries, mostly in Africa. The organization is called Leadership Initiatives, and it's based on the idea that empowerment can and will allow poverty-stucken individuals to rise up and create local businesses. Once these businesses prove successful, these individuals and the people they inspire will rise toward community government, then toward regional government and finally toward national government. in creating this meritocratic environment, Marshall Bailey, the founder, hopes to change the face of Africa from poverty to success. I think this idea is one of central importance to this conference. If more organizations and individuals start doing this kind of work, I truly believe that violent parts of Africa can become peaceful.

Thanks,
Zach Cutler

[jessica romo]

Michael,

I feel we are arguing the same point but from opposite sides of a coin. It seems you do not even grasp the background from which I am basing my comments. Development does not equal economic growth, just as Steve proved that economic growth can even happen when the rule of law and corruption exist, is that contributing to peace? Clearly not.

You asked "Do any of you see a realistic alternative to some form of this process (however tamed and civilized) of massive poverty alleviation through entrepreneurship and economic growth?" but I gave you the answer before: in order to make economic development work in the sense this forum is concerned - how to achieve peace - growth has to be accompanied by a fair distribution system, a sense of community, local participation in decision-making and exploitation of resources, freedom and others. These are not prerequisites to growth, they just make growth work better for more people and help combact some of the most popular problems encountered where economic growth happens (unequal distribution, individualism versus collectivity, exploitation and degradation of environment, etc).

It could be argued that even before being able to grow economically, one has to focus on education first. Education seen as the set of skills and knowledge to be able to use the resources available in order to create wealth, identify sustainable paths and use our potential to achieve different goals.

Corruption, violation of human rights and other social and environmental problems are not addressed by economic development. Money can't buy peace in tribes or between populations or countries that decide to fight for a piece of land or a certain resource. Nor can money build a sense of community where there isn't any, just as it's happened in Mexico where small entrepreneurs open businesses and they choose not to pay taxes, keeping all for themselves. In Mexico it is irrelevant how many days/procedures are needed to open a businesses, plenty bride authorities. Can we relay in economic indicators to tell us how societies interact and what are the social and environmental issues? No.

In short, there is not such a direct correlation between economic growth and peace. If developed countries have been successful is because they have implemented growth with other projects that address social issues, not the other way around. In fact, plenty of projects that have been far more successful than the private sector initiatives have come from other actors whose agenda is not to increase and foster economic development as such but the empowerment of the local community. It has even been proved that some communities rather have medicine than food aid, other might only need to sustain themselves and do not want to join the global economy, are we listening to all these different meanings of what development is for people around the world? Barely.

The Sustainable Development Commission has just published a document called: "Prosperity without Growth?" where they state:

"Prosperity without Growth?represents the culmination of an extensive inquiry by the UK Sustainable Development Commission into the relationship between sustainability and economic growth. That inquiry was launched in 2003, when the Commission published its landmark report – Redefining Prosperity – which challenged Government ‘fundamentally to rethink the dominance of economic growth as the driving force in the modern political economy, and to be far more rigorous in distinguishing between the kind of economic growth that is compatible with the transition to a genuinely sustainable society and the
kind that absolutely isn’t’. That earlier report summarised evidence of a ‘mismatch’ between economic growth, environmental sustainability and human wellbeing, and
called on politicians, policy experts, commentators, business people, religious leaders and NGOs to ‘put these issues on their must-get-to-grips-with agenda, rather than defer them endlessly as tomorrow’s issues’. The Commission itself kick-started that process with a series of stakeholder workshops (held during the latter part of 2003) to discuss the report’s findings.

During 2004 and early 2005, SDC worked closely with government to renew the UK Sustainable Development Strategy. In particular, the Commission itself led the engagement process that resulted in the five Sustainable Development ‘principles’. A key element in these principles is the recognition that – rather than being an end in itself – a ‘sustainable economy’ should be regarded as the means to reaching the more fundamental goal of a ‘strong, healthy and just society’ that is ‘living within environmental limits’ ".


It cannot be simpler this time :)

For more information visit: http://www.sd-commission.org.uk/publications/downloads/prosperity_w...

[flowidealism]

Hi Jessica,

The world is a big place, with many diverse phenomena, and it is difficult to make generalizations for which there are not exceptions. Clearly there are contexts in which everything that you say happens to apply, and there are other contexts in which perhaps only some elements may be relevant.

But I would hope that we could agree that there:

1. There is no good reason for it to be significantly more difficult to start a legal business in the developing world than it is in the developed world.

2. That poor nations with many jobs being created by successful small businesses led by local entrepreneurs would be a better world than poor nations where most of the jobs are either with multinational corporations or government.

For me, it is far more than a coincidence that there are extraordinary obstacles to starting and running a business throughout the developing world, and the fact that most of the developing world is characterized by unemployment, a large informal sector, and mass poverty.

Will legalizing small business solve all problems in the developing world? Not at all; in some cases there will be very urgent environmental issues that must be resolved, in other cases there may be conflicts over resources, in other cases long-standing ethnic battles, etc.

That said, while we are all working simultaneously on these other issues, in our different ways, I'm hoping that we can all agree to support a world in which it is no more difficult to start a business in poor nations than in rich nations, in which every nation on earth is at the current level of, say, Denmark, on the Doing Business Index.

You might think that this request is of only modest impact in terms of creating global peace, and that your concerns are more important. No problem, I have no interest in convincing you otherwise. But I happen to believe that the positive impact of improving business climates around the world is profound for peace.

Peace,

Michael

[Komal]

Like you explain, China has achieved a great amount of growth without a strong showing of many of the ingredients for development that have been discussed, such as education, democracy, etc. What I wanted to ask is that like China, India has been prospering economically however, the poverty level is still at a standstill. How is it that this country is growing tremendously but the impoverished areas of India are not affected by this growth? What I mean to say is that (and I may be wrong, I have not been following up on major improvements in India) but how is it that we are suggesting commerce reduces poverty - but in this case there is an increase in business and commerce yet there are no improvements in the poverty level?

[Jessica Reouveni]

Thank-you for your response.
I wanted to clarify that I was not at all suggesting that education rather than entrepreneurship would increase development in SA. I read the article by Bill Easterly and one of the main things that struck me was not that increased education doesn’t lead to increased development, but that education in a bubble isn’t effective. SA does in fact have resources, and technology- it’s simply not available to most of its citizens, some of which don’t even know it exists.

No, I don’t think increased education without entrepreneurship will lead to peace and prosperity, but I am also fairly certain that as far as SA goes, entrepreneurship without education won’t work either. This is precisely why I was so excited about the way Massango chose to become an entrepreneur and help his community become more educated at the same time. As he says in his interview, his community was not particularly educated, but when he provided them their first access to technology, he found demand was high and now business is booming.
On a side note, by encouraging locals in conflict zones to begin their own businesses with outside investment, there is less chance of them becoming hostile towards outside businesses they may perceive as coming to take over their country again. It’s really very much like the old adage of teaching a man to fish.

Ultimately, upward mobility is impossible without a basis of education. In a country where a shockingly high number of government officials are themselves illiterate, problems can only be corrected from the bottom up.

[Joyce Muthoni Njagi]

Empower youth with vocational and entrepreneur skills. Governments can ensure that this in incoporated in the National school curriculums in an age-graded and age-appropriate manner, right from junior schools through to tertiary learning institutions and universities.Rationalle: Often, children and youths have lesser biases and ethno-centrism towards one another compared to adults, and such an approach would promote positive socialization and enculturation of the individuals into the spirit of entrepreneurship , hence a transformed society that embraces peace through commerce.

[Christine Colello]

I really agree with you Joyce. Empowering our youth with these skills is the most important thing we can do to prepare them for the future and change the society of tomorrow. If these curriculums are incorporated from the time they are young, we will create a generation more highly prepared for their future and more likely to become a society that embraces peace through commerce Your rationale is also very interesting. I would have never thought of it that way, but it's true that many children have lesser biases and and this form of education at that age could help instill within them a positive attitude and create this transformed society you mentioned. Thanks for your insight!

[Efe Sevin]

Would I be too optimistic if I argue that economic development might also alleviate the severe conflict situations? As far as I am concerned, at least, with the help of economic development, although the conflicts cannot be solved but at least armed clashes will no longer be seen as a resolution method. In other words, parties will start talking about the conflicts and problems instead of fighting.

I agree with Joyce about the importance of vocational and entrepreneur skills. The policies should focus on how to get the youth to production and market as soon as possible.

I think we are overlooking at the communication aspect of economic development and exports. The advance of economy does not only produce fiscal results but with the expansion of the markets, communication bridges between people will be created.

[susan aaaronson]

I wonder if we can come up with some actual case study examples where a firm was able to help mitigate conflict--perhaps someone can suggest one-- or at least an example where a particular firm put forward a strategy that reduced conflict in a particular country. Then it would be great if we could get into the why and how? What motivated the company? (Leadership). How did the firm devise the strategy? How did the firm evaluate the strategy? I wonder if any one has done such firm level analysis.
I look forward to hearing from you.
Susan Ariel Aaronson, Ph.D.
GWU Elliott School

[Garret DeReus]

Susan,

While I do not know of any specific firm that has directly helped prevent a conflict situation, I do have an example of a firm that is indirectly, though their actions, helping to reduce tensions in developing nations, specifically Africa. That firm is Starbucks. I am not an avid fan of Starbucks (in fact I can hardly be called a fan at all since I believe that they have ruined the independent coffee shop). Regardless, however, it is obvious that Starbucks is helping to create a more peaceful situation in developing nations.

The causes of conflict situations are many and are the subject of a whole number of additional conferences. Without going into too many details some of the causes of conflict include:

Environmental destruction
Resource scarcity
Income inequality
High Unemployment
Poverty

In Starbucks dedication to 100% responsibly grown and ethically traded coffee beans they are helping nations in which their suppliers grow coffee beans to reduce the possibility of conflict. By growing their coffee responsibly they are reducing the environmental impact of their coffee production process. Environmental destruction can lead to conflict as people have fewer resources to work with and a reduced number of inputs with which they can create economic value.

Second, by paying their farmers more than average they are helping reduce the prevalence of the other four factors. This overall growing of the individual farmers first creates a direct infusion of economic growth. Second, this also shows to other people in Africa that there is hope and they have the possibility to rise out of poverty.

Overall, we can see that while Starbucks may not be directly stopping a conflict situation, sometimes the best solution is preventive medicine.